He figured out which leaders do and don’t have an impact, why that’s the case and what we can learn from them.

I interviewed him about leadership and how we can all learn to be better leaders.

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When do leaders actually matter?

Eric:

Can you explain the distinction between “filtered” versus “unfiltered” leaders and why it matters?

Gautam:

There’s a lot of social science that says leaders don’t matter, or they don’t matter very much… Leaders are not chosen randomly. Most large, powerful organizations have some sort of a process they use to evaluate candidates for being in charge. If you’re not what they’re looking for, they’re not going to choose you.

At the end of the day, the pool of people who might get the job is pretty small. The winner will basically be so similar to the losers that they’ll do the same things.

Most organizations I think actually work more like that, they push people out. Instead of thinking about a choice, what we should think about is a filter, where people get filtered out of the process, and they don’t make it.

Okay, so if that’s true, then logically if someone can somehow bypass the filters of an organization, gets the job for whatever reason, where the organization doesn’t really know what they had before they hired him or her, then logically that person could be very, very different from people who got the job, and then do things that those people would not have done and have a huge impact.

You can identify these people as people that were not fully evaluated before they gained power. It could mean being hired from outside of the CEO. It could mean being picked as the Vice Presidential candidate for random reasons, whatever, that have nothing to do with your ability to be President, and then the President dies and suddenly you’re President of the United States. That’s unfiltered too.

These people are likely to do either much better or much worse than a filtered person would in their shoes. That’s the central idea there, and then the question then becomes, “When do you want a filtered or an unfiltered leader, and is there any way to improve your odds of getting a good unfiltered one?”

I think there are lots of answers as to when you want an unfiltered leader, but there are two important ones. The first is if you’re desperate. If your company’s about to go bankrupt, your country’s about to lose a war. You might as well roll the dice.

The other situation where you might want one is analogous to that, it’s essentially when your losses are limited, but your gains are potentially infinite, like venture capital.

(Note: Gautam did an analysis of Presidents of the United States to test his filtered vs unfiltered theory. Turns out he was right — to the tune of being statistically significant at the 99.97% level. Yes, to those of you who know statistics: 99.97%.)

How can you be a better leader?

Gautam:

Whenever I give that talk, the first question I get is “How do I become a high-impact leader?” My answer is always, “Are you sure you want to be?” The easiest and most common way for a leader to have an impact is by destroying the company.

It’s this wonderfully American thing. “I want to have an impact on the world.” Are you sure? “The Simpsons” is in fact the source of all life wisdom. Marge Simpson actually has this quote in one of the episodes. “It’s true that one person can make a difference in the world, but they usually shouldn’t.”

Eric:

So how can you become a better leader?

Gautam:

More than anything else, “Know thyself.” Know what your type is. That if you are, both in the sense that you can use these coding rules to figure out okay, how would I score with the organization? But even more profoundly, think about your own personality… There are types, and I’m not saying be in the wings, I’m saying be who you are, and understand what the downfalls of that are so you can counteract that.

For instance, if you are a classic entrepreneur, you can’t work in an organization.Know that. Know that you should work on the outside, but also know that when you’re an outsider, the great ways in which outsiders fail is one, they either do really stupid things, or two, they don’t understand the context of the situation they’re in in the way that an insider would.

Eric:

Once you understand, “This is my kind of style,’ what’s the next step?

Gautam:

Then you’ve got to pick the environments that work for you. This is the thing that, again, context is so important. The unfiltered leader who is an amazing success in one situation will be a catastrophic failure in the other, in almost all cases. It’s way too easy to think, “I’ve always succeeded, I am a success, I am successful because I am a success, because it’s about me, and therefore I will succeed in this new environment.” Wrong.

You were successful because you happened to be in an environment where your biases and predispositions and talents and abilities all happened to align neatly with those things that would produce success in that environment. That doesn’t tell you a whole lot about the next environment down the pike.

What about “impression management”? Basically acting. Isn’t a lot of leadership something you can fake? Does this work? How do you separate the signal from the noise?

Gautam:

I think that stuff is really powerful. You would never doubt it. The question you have to ask is how much of this stuff can I do and be authentic? Because this sort of stuff is very effective, even when you’re inauthentic in short spans of time.

Changing yourself is not inauthentic. Part of what people do is they change. They evolve, they can grow, and they can change themselves.

So what it is to be authentic? It doesn’t mean you can’t change, but it does mean that the changes that you make, again, have to be aligned with the sense of who you really are, and who you want to be. As opposed to, “I’m doing this because I’m doing impression management.”

The body language stuff, etc, matters, but it only matters if the person you’re conveying is you and not a constructed aura that you just wanted to be, because you think this is what will get you success in this environment. You’re performing. If you perform for long enough you can begin to inhabit the role. You can begin to change who you are… When you’re acting out these roles, what you’ve got to remember is you are changing yourself. Over time you will change yourself into that person, so it had better be the person you genuinely want to be.

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Part 2

What’s the secret to picking great leaders?

Gautam:

Time. You’ve got to spend time evaluating people. My prescription is not to always pick the insider, that’s not it. It’s that most of the time you pick the insider because that’s someone you spent time getting to know.

Every system for picking people has random–I call them random and non-random elements. There’s stuff that tells you how good this person really is, and stuff that’s a pure play about luck. We know this, the way you wash out random elements is by giving them time to cancel out.

There is no Mr. Right — Only Mr. Right now

Gautam:

We say we want the best leader, and that word is screwing us over. With very rare exceptions, there’s no such thing. If you happen to get one of those exceptions, it’s like, congratulations, God was looking out for you.

Don’t make your strategy based on being able to find Abraham Lincoln when you need him, right? I think what we need to think is ‘the right leader,’ and need to get really comfortable with the idea that people, that this idea of there’s just someone who’s generally good at all situations doesn’t exist.

There are people who are pretty good at lots of situations, but they’ll never be as good as someone who’s only good at that situation. We need to be much more comfortable with term limiting CEOs, or telling them, ‘You’ve been great for five years, we love you. It’s time to move on.’

This is a weird thing. We fire people when they’ve failed, which makes sense, but if you only fire people when they fail, then it’s the classic you only sell stocks when they’ve lost. If you apply that logic to leaders as well, you should really send people out the door when they’re winning, not when they’re losing. Because guess what, that regression of the mean can happen to you, too.

Eric:

Is it more about the right leader for the right time, or is it the right leader for the right company, or both?

Gautam:

Overwhelmingly both. If there’s one thing I learned from this project, it’s that context is incredibly important.